11.30.2017

UPDATED: Tuesday, October 24th, 2017, 4:00 p.m.: Tesla is expanding in Los Angeles — fittingly, to a location right next to the freeway.

The electric car company, led by Elon Musk, signed a lease for the entire former Omnicom building at 4729-4755 Alla Road in Marina del Rey, The Real Deal has learned.

The deal, signed last week, gives Tesla 131,000 square feet of space across the four-story property, which sits on four acres of land near the 90 Freeway and the ocean. The property, last renovated in 2000, is owned by Pacific Properties Group, a partnership led by Black Equities Group, according to CoStar. Tesla’s lease runs at least seven years and is valued at about $30 million, sources said.

Asking rent at the property was $3.85 a square foot per month month for a modified gross lease, CoStar shows. The building has been vacant since 2015, when ad agency Omnicom moved to Playa Jefferson.

Rick Buckley of L.A. Realty Partners handles leasing at the building, but did not return requests for comment. Grant Newman of Madison Partners, formerly of L.A. Realty Partners, was part of the listing team.

Representatives of Tesla did not immediately respond to requests. A representative of Black Equities declined to comment.

A permit was filed on Sept. 18 for a sign on the building that says “Tesla,” Department of Building and Safety records show. It has not yet been approved. On Oct. 16, a permit was filed for alterations to the building. It requested a tenant improvement to existing office and warehouse, the removal of a loading ramp, the removal of existing partition walls and the installation of a new interior door, records show.

Sources speculated Tesla’s Marina del Rey lease could be for a repair center, a delivery point or a production facility. While the company has a showroom in nearby Santa Monica, it lacks a delivery point in the area for the Model 3 cars it is planning to roll out, sources said. Having a repair stop near the highway would reduce long wait times for parts.

Tesla recently fell short on production targets for its more affordable Model 3, leading JPMorgan to reaffirm its underweight rating of the company’s shares and reduce its price target, predicting the issues will continue.

The company is close to finalizing a deal to produce Teslas in a free-trade zone in Shanghai, The New York Times reported on Sunday. If it succeeds, it would be the first foreign company to do so.

This story has been updated to add the name of an additional listing broker.